NFFC Financial Talk

[Username]

Is it true that if we give Wood a new contract, we can amortise his contract to 7.5m meaning the losses would then go from 12-17m to 5-10m then we have Mangala whose sale should go through before July for 25m which would represent a profit of around 17m taking us to a profit of around 7-12m. So seemingly wouldn't need to sell MGW or Murillo before June. 

Worrall to Besiktas for 4m may still happen also having played recently and he wants to stay there. That would put us at 11-16m profit. We would be fine.

Yes that is correct.
Because it was 15m with a 1yr contract, if we offer him a 12 month extension before 30th June, his amortised cost reduces from 15m to 7.5m in this years accounts.

Mangala, + Wood extension almost gets us to where we need to be.
In an ideal world that happens so we can then use the whole window to get as much as possible for Murillo

Where are you getting this from please as I don’t understand it to be correct?

[Paplane]

Anyone else think there’s a can of worms being opened at the moment?
Any inconsistencies and we cry foul with good legal reason.

The Leicester charges will add to the outcry and, irrespective of individual financial management, there will be a growing body of thought that the rules are there to protect the cartel.

This could get messy and is going to be great box office for the neutrals.

I disagree. Its not box office. Its  the prem eating itself up. Its a car crash in slow motion. June is going to be an absolute joke this year as top 6 clubs pick off the players of their choice. 6 buying teams and 14 sellers. I honestly believe this is the prem bubble bursting.

It wouldn’t happen if “the other 14 clubs” consistently voted together as a block against rule changes that favour the big 6. I don’t follow that closely but as far as I am aware this whole thing has just been allowed to happen. One of my disappointments with Forest is that during our brief return to the PL we have usually voted with the bigger clubs in most matters for example voting against the proposed EFL deal. Its like we have forgotten who we were a few months ago.

Not entirely true Salv. We voted against the restrictions of business between clubs in a multi-club model.

And on the wider point, Palace are often portrayed as a model sensible prem club yet I can remember a few years ago hearing their chairman resisting amendments to the parachute payment system. He came out with some bollocks and asked why should palace fund clubs like us, leeds and stoke who had more wealthy owners than they do.

Turkey's don't vote for christmas. The only way the prem becomes real again is by government level intervention. This current situation is 30 odd years in the making.

[Salvatore Matrecano]

Yes fair enough Pap and although I agree about Government intervention they could well mess it up too, I don’t trust any political party to get it right, politicians would still be heavily lobbied by the bigger clubs.
Regardless the PL will resist as long as they can and the Palace example you use is part of the problem. There remains too much self interest by individual clubs, If Forest voted with Palace and other smaller clubs consistently the big boys wouldn’t be able to push through their agenda. Eventually they would get frustrated a piss off to form their Superleague.

[Paplane]

Yes fair enough Pap and although I agree about Government intervention they could well mess it up too, I don’t trust any political party to get it right, politicians would still be heavily lobbied by the bigger clubs.
Regardless the PL will resist as long as they can and the Palace example you use is part of the problem. There remains too much self interest by individual clubs, If Forest voted with Palace and other smaller clubs consistently the big boys wouldn’t be able to push through their agenda. Eventually they would get frustrated a piss off to form their Superleague.

Yep, agree with all that Salv. Power to people comrade!

[Reds73]

Is it true that if we give Wood a new contract, we can amortise his contract to 7.5m meaning the losses would then go from 12-17m to 5-10m then we have Mangala whose sale should go through before July for 25m which would represent a profit of around 17m taking us to a profit of around 7-12m. So seemingly wouldn't need to sell MGW or Murillo before June. 

Worrall to Besiktas for 4m may still happen also having played recently and he wants to stay there. That would put us at 11-16m profit. We would be fine.

Yes that is correct.
Because it was 15m with a 1yr contract, if we offer him a 12 month extension before 30th June, his amortised cost reduces from 15m to 7.5m in this years accounts.

Mangala, + Wood extension almost gets us to where we need to be.
In an ideal world that happens so we can then use the whole window to get as much as possible for Murillo

Where are you getting this from please as I don’t understand it to be correct?

That’s how amortisation of players works.

Buy player for 20m on a 5 yr contract
Cost in accounts is 4m per year

After 3 years the outstanding cost is 8m (3 x 4m already accounted for).

Player then gets 2 yr extension, hence has 4 yrs remaining on deal.
The annual cost reduces to 2m a year for next 4yrs to account for the 8m outstanding.

This is how amortisation works and has always worked.

[Username]

Is it true that if we give Wood a new contract, we can amortise his contract to 7.5m meaning the losses would then go from 12-17m to 5-10m then we have Mangala whose sale should go through before July for 25m which would represent a profit of around 17m taking us to a profit of around 7-12m. So seemingly wouldn't need to sell MGW or Murillo before June. 

Worrall to Besiktas for 4m may still happen also having played recently and he wants to stay there. That would put us at 11-16m profit. We would be fine.

Yes that is correct.
Because it was 15m with a 1yr contract, if we offer him a 12 month extension before 30th June, his amortised cost reduces from 15m to 7.5m in this years accounts.

Mangala, + Wood extension almost gets us to where we need to be.
In an ideal world that happens so we can then use the whole window to get as much as possible for Murillo

Where are you getting this from please as I don’t understand it to be correct?

That’s how amortisation of players works.

Buy player for 20m on a 5 yr contract
Cost in accounts is 4m per year

After 3 years the outstanding cost is 8m (3 x 4m already accounted for).

Player then gets 2 yr extension, hence has 4 yrs remaining on deal.
The annual cost reduces to 2m a year for next 4yrs to account for the 8m outstanding.

This is how amortisation works and has always worked.

I fully understand how amortisation works.

However, using the concept you are suggesting we could give MGW another four years to spread the cost.

I don't think that is correct. It would also involve submitting restated accounts.

Do you know for a fact what you are suggesting is correct by EPL accounting standards or is it something you think is right?

[Reds73]

Is it true that if we give Wood a new contract, we can amortise his contract to 7.5m meaning the losses would then go from 12-17m to 5-10m then we have Mangala whose sale should go through before July for 25m which would represent a profit of around 17m taking us to a profit of around 7-12m. So seemingly wouldn't need to sell MGW or Murillo before June. 

Worrall to Besiktas for 4m may still happen also having played recently and he wants to stay there. That would put us at 11-16m profit. We would be fine.

Yes that is correct.
Because it was 15m with a 1yr contract, if we offer him a 12 month extension before 30th June, his amortised cost reduces from 15m to 7.5m in this years accounts.

Mangala, + Wood extension almost gets us to where we need to be.
In an ideal world that happens so we can then use the whole window to get as much as possible for Murillo

Where are you getting this from please as I don’t understand it to be correct?

That’s how amortisation of players works.

Buy player for 20m on a 5 yr contract
Cost in accounts is 4m per year

After 3 years the outstanding cost is 8m (3 x 4m already accounted for).

Player then gets 2 yr extension, hence has 4 yrs remaining on deal.
The annual cost reduces to 2m a year for next 4yrs to account for the 8m outstanding.

This is how amortisation works and has always worked.

I fully understand how amortisation works.

However, using the concept you are suggesting we could give MGW another four years to spread the cost.

I don't think that is correct. It would also involve submitting restated accounts.

Do you know for a fact what you are suggesting is correct by EPL accounting standards or is it something you think is right?

It doesn’t involve submitting re-stated accounts at all.

In the Chris Wood example his 15m fee all goes into the accounts that end 30th June 2024 as he only signed a 1 yr deal.
However, if he were to sign a 12 month extension pre 30th June 2024, then the cost in the accounts from 1st July 2023 to 30th June 2024 would be 7.5m

The other 7.5m would be included in 1st July 2024 to 30th June 2025 accounts.

Re your MGW Example 

30m fee 5 yr contract signed = 6m a year cost.
So currently 12m has been amortised as at 30th June 2024 so 18m remaining.

If he were to sign a new 4 yr comtract, the max length you can now amortise is 5yrs.

So the remaining 24m would be spread over 5 yrs, meaning 4.8m would go into this years accounts rather than 6m

It doesn’t change the amount you have already amortised in the previous year.

[The reds]

Leicester are going to open urgent legal proceedings against the EPL and the EFL 

This is probably the first of many teams doing this. Will Forest follow suit in the future.

[Paplane]

Leicester are going to open urgent legal proceedings against the EPL and the EFL 

This is probably the first of many teams doing this. Will Forest follow suit in the future.

ooh, could we could potentially join those legal proceedings if we feel there's legal questions over the switching between the leagues, eg Covid allowances and promotion bonuses? De Marco acted for Leicester too in their legal scrap with the EFL a few weeks ago.

[Tricky]

Leicester are going to open urgent legal proceedings against the EPL and the EFL 

This is probably the first of many teams doing this. Will Forest follow suit in the future.

Never thought I would hear myself say this, but I hope Leicester beat them!!!

[Paplane]

Leicester are going to open urgent legal proceedings against the EPL and the EFL 

This is probably the first of many teams doing this. Will Forest follow suit in the future.

Never thought I would hear myself say this, but I hope Leicester beat them!!!

Feels dirty Tricky, doesn't it.

[The reds]

Leicester are going to open urgent legal proceedings against the EPL and the EFL 

This is probably the first of many teams doing this. Will Forest follow suit in the future.

Never thought I would hear myself say this, but I hope Leicester beat them!!!

Feels dirty Tricky, doesn't it. 

Nick De Marco KC is representing them, he gets around a bit too. Do we reckon he advises us to appeal.